A PAC is using the midterms to spotlight high drug prices. Why is it sinking millions into unwinnable races?

SAN FRANCISCO — In 26 years in Congress, Rep. Anna Eshoo has always won reelection by at least 20 points. The Democrat is virtually certain to win big once again in November, buoyed largely by voters in her wealthy Silicon Valley district who do not struggle to pay for their prescription drugs.

So why is a political action committee focused on high drug prices bothering to sink $500,000 into attack ads against her?

The ad blitz from Patients for Affordable Drugs highlights the unorthodox tack the group is taking in the 2018 midterm elections: intervening in races in which there is no hope of altering the outcome.

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Of the nine congressional and gubernatorial races in which P4AD has supported or opposed candidates to date, just three or four are competitive, according to STAT’s analysis of election forecasts from the website FiveThirtyEight.

And of the at least $8 million the group has spent in total, as much as $6 million has gone to the races in which the outcome has long been determined.

P4AD, which is funded mainly by the billionaire Houston couple John and Laura Arnold, says that where its money can’t help decide a race, it can still send a message: that politicians running campaigns funded by drug companies will face retribution. But that, too, is a dubious strategy, experts say.

If the goal is to make politicians hesitate before accepting a check, “pharma’s not at the stage of the NRA,” said Bob Blendon, a Harvard professor who studies the politics of health care. “It’s going to be years before somebody runs in this state or that with a major biotech presence [and says] they’re not going to accept [drug industry] funding. I’m not sure it’s a realistic goal.”

P4AD is the first outside group to focus on access to prescription medicine as a singular campaign issue, aiming to capitalize on angst regarding drug pricing both from Democratic lawmakers and a Republican president.

Eshoo, a Democrat with close ties to party leadership, has presented the group with a prime opportunity to punish one of the drug industry’s favorite lawmakers. In fact, she has accepted more campaign cash from the pharmaceutical and health products industry than any other House member.

“We thought, damn it, Anna Eshoo takes more money than any other candidate in the House and she does pharma’s bidding,” said David Mitchell, P4AD’s president and a former political operative aligned with the Democratic Party. “We’re going to go in there and say: You don’t get a free ride anymore.”

And so P4AD’s ads targeting Silicon Valley voters, online and by mail, brand Eshoo as being “in the pocket of Big Pharma.”

As Julia Boss, a patient advocate and a critic of P4AD, sees it, “intervening in a race like Anna Eshoo’s is about who gets in the door of the representative’s office after the election. P4AD is using this race to tell politicians they’re going to make pharma’s money toxic.”

The strategy has raised eyebrows in some more traditional circles, where spending millions for any purpose other than to change the composition of Congress is rare.

“Trying to go after Democrats who have the nomination, who take pharmaceutical money, just wouldn’t be my priority,” Blendon said. “Not when you’re trying to capture the House for a much more activist set of views on health care, regulation, insurance coverage — it just would seem odd for that.”

Mitchell, however, is upfront that his goal is not to unseat Eshoo or others like her. Instead, he hopes the clarion call will ensure there is both a carrot for candidates who stand up to the drug industry and a stick for those who, in his view, vote with drug companies and against patient interests.

Along the way — and in some cases by design — P4AD has made enemies among politicians, drug makers, and even fellow patient advocates.

One Republican campaign the PAC has targeted with attack ads has called P4AD “a partisan front group run by a career Democrat.” A new pro-pharma advocacy group that launched this week, funded with seed money from people in the drug industry, said on its website that P4AD is intervening in “uncompetitive races” and “pushing policies with no proven record of lowering drug prices but that could dramatically undercut the incentive structure for the researchers and investors developing these new treatments.”

And some people in both the drug industry and the patient advocacy community — groups that are rarely aligned — believe that P4AD’s laser focus on drug manufacturers misleadingly overlooks other actors, like insurers, that bear responsibility for high drug costs.

“The common thread running through P4AD’s interventions is not the political affiliation of the candidates or the advancement of a specific pro-patient policy that would reduce the price of drugs at the point of sale,” said Boss, who is president of the Type 1 Diabetes Defense Foundation, a legal advocacy group that does not accept corporate funding.

The real recurring theme, she said, is that P4AD seems to be looking for races that support the Arnolds’ “anti-pharma narrative,” rather than telling a fuller story that points to insurers.

The Arnolds, who made their fortune from John Arnold’s career at Enron and later the hedge fund he started, have been pouring money into shaping the conversation around drug pricing. They’ve backed research into whether drugs are worth their price tag and a new not-for-profit company that will produce generic drugs where it sees competition lacking. It’s not clear yet exactly what the couple’s end goal is with respect to drug pricing policy, or if they even have one.

In one instance, P4AD is supporting a candidate beloved by insurers but hated by drug makers: Missouri Sen. Claire McCaskill, a Democrat fighting to keep her seat in a state President Trump won by 18 points.

While McCaskill is among the lawmakers most openly critical of the pharmaceutical industry, she is also a favorite of major health insurers — Aetna, Cigna, Blue Cross Blue Shield, and Humana have sent many of their largest political contributions this year to her campaign.

While McCaskill’s race is close, most other cases of Mitchell weighing in on races involve opposing ultra-safe candidates. One such eye-popping number: $1.4 million spent to oppose Sen. Tom Carper (D-Del.), who came under fire for his supposed coziness with the drug industry in a recent primary. The spending, however, came after Carper’s nomination was secured. Like Eshoo, Carper is not facing a credible Republican challenge.

Mitchell is cognizant of P4AD’s scope, and said the group agonized over whether to wade into specific races at all. (The nonprofit’s political arm, a type of group that can get involved in political activity, is buying the ads.) P4AD already runs broader issue ads, aiming to serve as an oppositional force to the pharmaceutical industry on all things political.

When drug lobbyists last month used an unrelated bill to attempt to save the industry billions on medicines purchased via Medicare, P4AD was ready with a video ad, ominous voiceover included: “Big pharma’s trying to cut a backroom deal in Washington.”

The group bills itself as nonpartisan and has backed and opposed candidates from each major party. In an interview, Mitchell declined to state a preference for which party controls Congress come 2019.

“What matters to us is a Congress — and to the extent that there’s backwash, state legislatures — more receptive to doing something around drug prices,” Mitchell said. “I’d even take it a step further: who understand that the issue has political power and that voters want something done.”

Mitchell’s professional background, however, is as a partner at a left-leaning policy and communications firm in Washington (which worked with PhRMA to cut ads supporting passage of the Affordable Care Act) before retiring in 2016 and turning his attention to the advocacy group. The group’s executive director, Ben Wakana, was one of the top spokesmen for the Department of Health and Human Services under former President Obama.

P4AD, indeed, is spending more heavily in favor of Democrats than of Republicans — at least $5.38 million in Democrats’ favor, compared to somewhere between $2.81 million and $3.70 million in Republicans’ favor. (The uncertainty is because the group hasn’t disclosed exact spending numbers in certain cases.)

Mitchell said the group’s spending skews in favor of Democrats in part because of his desire to serve as a “counterweight” to the drug lobbying group PhRMA, which in recent cycles has spent more heavily on Republicans than Democrats by at least a 60-40 margin.

For all the speculation about why Mitchell would invest so heavily in races in which he can only hope to shape the narrative, the group is in fact engaged in numerous races in which an aggressive, focused ad buy has potential to tip the scales.

In Missouri, the group continues to enthusiastically support McCaskill. And in the reelection bids of Reps. Bruce Poliquin (R-Maine) and Pete Sessions (R-Texas), the group has weighed in to criticize the lawmakers for “giving drug corporations massive tax breaks while doing nothing to lower drug prices.” Each of those races, according to election forecasters, is effectively a coin flip.

There’s another advantage to weighing in on uncompetitive races that have attracted little attention: P4AD often winds up the only voice in the room, giving its message more space to reverberate.

Such is the case in Eshoo’s race, and in Carper’s, and in other races where they are buoying safe Republicans, like Gov. Charlie Baker of Massachusetts or Rep. David McKinley (W.Va.), both of whom Mitchell said have been leaders on reducing drug costs.

Perhaps the biggest test case for whether P4AD is wasting its money is a U.S. Senate race in New Jersey, where the group has already spent $3.23 million to oppose the candidate who has quickly become their archnemesis.

Bob Hugin, the former CEO of the pharmaceutical company Celgene, is the Republican challenger to Sen. Bob Menendez (D-N.J.). Hugin is losing — according to FiveThirtyEight, he has just a 1-in-10 chance of prevailing next month.

Even before recent polling showed him drawing within single digits of Menendez, P4AD cut ads branding Hugin as “the guy who made a killing,” criticizing him for raising Revlimid’s price.

P4AD is not the only or the loudest voice in the New Jersey Senate race. Other outside groups are funding attack ads against both candidates, too, and it’s hard to tell how much influence P4AD’s ads, specifically, are having. And in a state where many voters work for pharmaceutical companies, ads trying to drum up hatred of the industry may not have the same effect they would have elsewhere.

Still, “in a race to define the other candidate as the worst person on the planet, these ads are doing a pretty good job of painting Bob Hugin” that way, said Matthew Hale, an associate professor of political science at Seton Hall University in New Jersey.

Opposing Hugin has become a personal mission for Mitchell, and many of his talking points have bled into Menendez’s separate reelection campaign.

Though Menendez himself has accepted more drug company cash than all but one sitting senator (including contributions from Celgene), the senator’s campaign has run with the questionably accurate claim that that Hugin, while at Celgene, “spiked the prices of prescription drugs by 500%, just to pack his own pockets.”

While Celgene has substantially hiked Revlimid’s price — numerous patients like Mitchell, who has multiple myeloma, have indeed experienced a fivefold increase in their insurance copays — the drug company has not raised the list price of the product by 500 percent during any recent stretch.

Whether or not Menendez’s claim is fully accurate, Mitchell maintains the drug he depends on costs far too much.

Billions of dollars depend on tailoring the narrative. It is no surprise this PAC would want to spread partial information, it works. The mass media and these quasi medical sites have not kept the public informed. Any survey of mass media and popular commercial sites, would show the lack of any objective coverage of this topic. There is too much money at stake, to keep the public informed.
A little misinformation goes a long way.

The American public is so misinformed, distracted and propagandized, because pharma and other industries control their news media. Pharam prices are barely covered at all in their local news, and when it is, it always the most superficial and deceptive way. Our news media normalized the money given to all candidates on both sides. People like Bernie Sanders have been effectively censored too, they are not good for pharma profits. We will never see the mass media do any investigative journalism on how this effects healthcare delivery, or anyone personally.
Pharma even “educates’ journalists, at small city newspapers, on how great they are for Americans. Since the corrupt deal with Medicare Part D, most people are unaware how many Medicare and Medicaid dollars go to overpriced pharma schemes.
No one in my state tracked how many extra cases of Hep C were caused because the cure was too expensive, so our state rationed it. Pharma controls the data collected also. We don’t know how many tax payers dollars were wasted on pharma products that caused adverse events or hospital admissions. The media conflated the opioid debacle with other prescription drug deaths, and heroin, for a reason. The true numbers are a secret.